Mali Reduces Gold Production on Behalf of Sadiola Delays

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(Reuters) – Mali, Africa’s third-largest gold manufacturer, has cut its gold output outlook this year to 49 tons from 57 due partly to hold ups at Anglogold Ashanti’s Sadiola junction venture, agents said.

Mining Minister Amadou Baba Sy said the government had decreased estimates for developed gold production to 45 tons this year, from a previous forecast of 53 tons in February. Mali’s total gold yield furthermore encompasses artisanal production of about 4 tons per year.

Last year, developed output was 46 tons and total output 50 tons.

Lassana Guindo, controller general of the nationwide Directorate of Geology and Mines, said that a drop in international gold charges was weighing on miners.

“We have lowered our forecasts due to smaller production in some mines, principally the Sadiola gold mine,” he added. “This mine was presumed to start below ground output but will not do so this year because of mechanical difficulties with electricity.”

Sadiola, in southwest Mali, has been an open-cast mine in which both South Africa’s Anglogold Ashanti and Canada’s IAMGOLD contain a 41% stake.

Anglogold said in February it was postponing a $500 million expansion and below ground development of the mine due to security anxieties following a French military intervention to oust Islamist rebels from to the north Mali.

Precious metals mining companies are under pressure to slash charges as gold price have dropped 20% this year to beside a three-year low.

Mali elected a new leader on Sunday, previous major Minister Ibrahim Boubacar Keita, in its first polls since the French military intervention.

Developed production should increase to 50 tons in 2014, for a total yield of 54 tons, the minister said.

The mining sector’s assistance to government revenue, meantime, strikes a record of 275 billion CFA francs ($554.9 million) last year, up from 232 billion the preceding year.